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I came across a couple of interesting national stories today that illuminate some of what I’ve heard recently in the local housing market.
Appraisers are the thorn in the side of many sellers, buyers and homeowners hoping to refinance right now, as banks have issued directives to be extra-conservative. I have heard this from many local real estate folks, and today’s Wall Street Journal takes a detailed look at the issues. Here’s a good example:
Patti Sanders, an aerospace engineer in Oakdale, Calif., knew prices were down sharply but said she was “flabbergasted” recently when her 3,100-square-foot Victorian home was appraised at $250,000, compared with $635,000 assayed two years earlier. The new estimate prompted a lender to reject her application for a refinancing that would have lowered her mortgage payments about $400 a month.
And here’s one along the lines of my Alt-A story last week.
Nationally, defaults in prime loans are accelerating, reports the USA Today:
In the first quarter, almost half of the overall increase in the start of foreclosures was due to the increase in prime, fixed-rate loans, according to the Mortgage Bankers Association (MBA). At the end of the fourth quarter, 2.4% of prime mortgages were seriously delinquent, more than double the 1.1% at the end of March 2008, according to a report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision.
Here’s a graph showing the growing defaults by loan type in San Diego County: